S&P Global Platts - The BP-operated Rhum gas field in the UK North Sea has received a conditional license from the US Office of Foreign Assets Control that allows it to continue operating until the end of October 2019, Serica Energy said on Tuesday.

There has been uncertainty around the possible impact on Rhum's operations due to it being 50% owned by a subsidiary of Iran's state-owned NIOC. UK producer, Serica Energy has agreed to take over BP's 50% share.
A threat of closure as soon as next month had been hanging over the field if it did not win an exemption from US sanctions against Iran that are set to take effect on November 5.

The Office of Foreign Assets Control license allows US entities to provide goods, services and support to Rhum, Serica said. It is valid until October 31, 2019, but can be renewed on application.

"OFAC has also provided an assurance that non-US entities providing goods, services and support involving Rhum will not be exposed to US secondary sanctions," the company said.

"These OFAC actions will enable production from the Rhum field to continue unaffected," it said.

Both the license and the assurance are conditional on NIOC's revenue from Rhum being held in escrow while US sanctions apply. This change must be in place by November 4.

Further, NIOC will have no decision-making powers over Rhum during the period, Serica Energy said.

For its part, Serica said attainment of the license allowed it and BP to finalize the "BKR transaction", under which Serica is to acquire BP's interests in the Bruce, Keith and Rhum fields. The parties aim to have this done by November 30.

Rhum and the linked Bruce field produce at around 5 million-6 million cu m/d -- the equivalent of 1.8-2.2 Bcm/year -- according to UK government data, representing as much as 6% of UK gas production and 3% of UK gas consumption.

The UK gas market is currently very tight, with the NBP day-ahead price at its highest sustained level since 2013.

The loss of Rhum production for a prolonged period over the winter would have an additional bullish impact on the already tight UK gas market.

Rhum was closed completely due to international sanctions against Iran from late 2010 until November 2014 when it resumed production having won the first exemption allowing its restart before the sanctions against Tehran were lifted in January 2016.